We explain why and how we are engaging with companies and partners to improve the global food-supply chain.

Key Points:

  • Sustainability of our food system is one of our engagement policy objectives this year.
  • Agriculture is responsible for 10-12% of global human-induced green-house gas emissions and 70% of global water consumption.
  • It is a leading contributor to deforestation, which can cause significant damage to biodiversity, and contributes to a heightened pandemic risk through domesticated animals.
  • Almost two billion people are overweight or obese, and an estimated 815 million people still go hungry every day, placing increasing cost burdens on health-care systems.
  • We see opportunities in regenerative agricultural practices, the use of precision agricultural technology, and continually evolving innovative practices such as aquaculture or vertical farming.
  • We are working with Farm Animal Risk and Return (FAIRR) and ShareAction’s Healthy Markets campaign to help enhance healthy nutrition and improve agricultural practises.

Food plays a central role in our daily lives. It is essential to our survival, but also significant in terms of our cultures, our identities, and how we socialise. The integration of food with our lifestyles means that we often feel emotively about what and how we eat, which can create barriers to making behavioural changes. However, we do need to change our current global food system.

The Intergovernmental Panel on Climate Change (IPCC) estimates that agriculture is responsible for 10-12% of global, human-induced green-house gas emissions.[1] Moreover, around half of all habitable land is taken up by agriculture,[2] as is 70% of global water consumption,[3] much of this to support the production of animal protein.

Depleted biodiversity, pandemic threat

However, the environmental damage wreaked by agriculture goes deeper still. First, it is responsible for the pollution of our air and waterways owing to the extensive uses of fertilisers and pesticides. Secondly, there is an increased risk of disease and pandemic associated with livestock farming, with 50% of zoonotic viruses found in just 12 domesticated animal species.[4] Agriculture is also a leading contributor to deforestation, which continues to occur in order to grow commodities such as soy and palm oil, or to raise livestock, which can cause significant damage to biodiversity.

Alongside the extensive environmental degradation encountered in the pursuit of our food production, we are still doing an incredibly inefficient job in terms of how that food is consumed. According to the Access to Nutrition Index, one in three people worldwide are either overweight or underweight: almost two billion are overweight or obese, and an estimated 815 million people still go hungry every day. Moreover, two billion people are micronutrient-deficient.

Rising costs

The consequences of these nutritional issues are far-ranging, with impacts on our mental health, government balance-sheets and productivity. It is estimated that in the UK alone, by 2050, the related annual costs will be £9.7 billion for the National Health Service, and almost £50 billion for broader society.[5]

It is becoming abundantly clear that our current food system is unsustainable in its present state and cannot support the additional two billion inhabitants our planet is expected to have by 2050. The second United Nations Sustainable Development Goal is dedicated to just this: ending hunger, achieving food security, improving nutrition, and promoting sustainable agriculture.

As such, we expect to continue to see changes in how we consume foods, with growing preferences for healthier, less processed, and more plant-based products. Alongside this, we anticipate significant changes to how our food is produced, with an increase in regenerative agricultural practices, the use of precision agricultural technology, and continually evolving innovative practices such as aquaculture or vertical farming, which are both supported by regulation.

Our focus on food sustainability

The sustainability of our food system is one of our engagement policy objectives this year. Our objective for companies that we engage with is to ensure that there is a strategy in place to reduce the social and environmental impacts of products and operations across the full value chain.

We want to see improved nutritional content of food without further increasing the strain on our environment, and to help ensure that, globally, we have access to affordable, nutritious, and sufficient food. However, the impacts of our food system are so far reaching that we also see this influencing a number of our other engagement policy objectives, such as reaching net-zero carbon emissions, managing biodiversity, using resources efficiently, and treating all employees and supply chain workers with respect and dignity.

Working with others

To further our engagement efforts, we are collaborating with Farm Animal Investment Risk and Return (FAIRR) and the Healthy Markets campaign at ShareAction. Alongside FAIRR, we are encouraging companies to further develop alternative-protein strategies, and to consider the current risks that their proteins may pose, and the opportunities associated with plant-based products. We want to see that food manufacturers and retailers fully understand existing animal-agriculture risks, but also that they are setting time-bound commitments to move to a more sustainable product portfolio, and evidence of research and development, and consumer engagement, to support this transition.

We are also participating in engagements on sustainable aquaculture, focusing on how salmon-farming companies can better manage the environmental issues they face, and potentially serve as a more sustainable source of protein.

Last, but not least, we are supporting the Healthy Markets campaign at ShareAction as members of the coalition working group. This group’s purpose is to improve public health, with a particular focus on childhood obesity. As such, our collaborative engagement efforts target food manufacturers and retailers, encouraging companies to improve public disclosures around sales of healthy and unhealthy products, and to move their product portfolio to offer more nutritious and healthy products to consumers.

 


[1] Source 1
[2] Source 2
[3] Source 3
[4] Source 4
[5] Source 5

Important information

This is a financial promotion. These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. This material is for professional investors only. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those securities, countries or sectors. Please note that holdings and positioning are subject to change without notice. Issued by Newton Investment Management Limited, The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England No. 01371973. Newton Investment Management is authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN and is a subsidiary of The Bank of New York Mellon Corporation. Newton Investment Management Limited is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. Newton’s investment business is described in Form ADV, Part 1 and 2, which can be obtained from the SEC.gov website or obtained upon request. ‘Newton’ and/or ‘Newton Investment Management’ brand refers to Newton Investment Management Limited.

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Newton Investment Management Limited is exempt from the requirement to hold an Australian financial services licence in respect of the financial services it provides to wholesale clients in Australia and is authorised and regulated by the Financial Conduct Authority of the UK under UK laws, which differ from Australian laws.

Newton Investment Management Limited (Newton) is authorised and regulated in the UK by the Financial Conduct Authority (FCA), 12 Endeavour Square, London, E20 1JN. Newton is providing financial services to wholesale clients in Australia in reliance on ASIC Corporations (Repeal and Transitional) Instrument 2016/396, a copy of which is on the website of the Australian Securities and Investments Commission, www.asic.gov.au. The instrument exempts entities that are authorised and regulated in the UK by the FCA, such as Newton, from the need to hold an Australian financial services license under the Corporations Act 2001 for certain financial services provided to Australian wholesale clients on certain conditions. Financial services provided by Newton are regulated by the FCA under the laws and regulatory requirements of the United Kingdom, which are different to the laws applying in Australia.

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